"Debt consolidation entails taking out one loan to pay off many others. This is often
done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.
In the United States, federal student loans are consolidated somewhat differently, as federal student loans are
guaranteed by the U.S. government. In a federal student loan consolidation, existing loans are purchased and closed
by a loan consolidation company or by the Department of Education (depending on what type of federal student loan
the borrower holds). Interest rates for the consolidation are based on that year's student loan rate, which is in turn
based on the 91-day Treasury bill rate at the last auction in May of each calendar year.
Student loan rates can fluctuate from the current low of 4.70% to a maximum of 8.25% for federal Stafford loans, 9% for
PLUS loans. The current consolidation program allows students to consolidate once with a private lender,
and reconsolidate again only with the Department of Education.[citation needed] Upon consolidation, a fixed interest rate is
set based on the then-current interest rate. Reconsolidating does not change that rate. If the student combines loans of different
types and rates into one new consolidation loan, a weighted average calculation will establish the appropriate rate based on the
then-current interest rates of the different loans being consolidated together.
Federal student loan consolidation is often referred to as refinancing, which is incorrect because the loan rates are not
changed, merely locked in. Unlike private sector debt consolidation, student loan consolidation does not incur any fees for
the borrower; private companies make money on student loan consolidation by reaping subsidies from the federal government.
Student loan consolidation can be beneficial to students' credit rating, but it's important to note that not all federal student loan
consolidation companies report their loans to all credit bureaus."
Information found at: Wikipedia
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Dear Student Loan Consolidation Enthusiasts,
I am writing to you in behalf of your Heavenly Father. He is seeking you like a lost sheep. You remember the Bible story?
It is about a shepherd who has 100 sheep. But when he brings the sheep home one night, one is missing. He then leaves
the 99 sheep and goes out into the wilderness until he finds that lost sheep.
In this parable the shepherd goes out to search for the one lost sheep-the very least that can be numbered. So if there had been
but one lost soul, Christ would have died for that one. To read more click
Lost Sheep?
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